Canaan Raises $50 Million in Funding for Expansion
Bitcoin mining rig manufacturer, Canaan Inc, has raised $50 million in a recent funding round by selling preferred shares. The funds will be used to expand research, innovation, and production capacity. The funding came from an undisclosed institutional investor who purchased 50,000 series A Canaan shares at $1,000 each.
“Pursuant to the second tranche of the Preferred Shares Financing, the Company issued 50,000 Preferred Shares at the price of US$1,000.00 per Preferred Share and caused The Bank of New York Mellon to deliver 2,800,000 American depositary shares (“ADSs”), each representing fifteen Class A ordinary shares of the Company, at the price of US$0.00000075 for each ADS.”
The company plans to use the funds to improve its production capacity and focus on innovation and research. This funding round follows a previous $25 million raised by Canaan to support its business operations.
Canaan Prepares for Bitcoin Halving with Increased Mining Capacity
As mining activity increased in late 2023, miners experienced higher profits. Canaan aims to capitalize on this trend by improving its mining capacity. This push is driven by the upcoming Bitcoin halving event that will reduce miner rewards.
Bitcoin halvings are traditionally seen as bullish for the market. Miners with increased capacity have the potential to earn higher price rewards despite reduced mining rewards. In Q2 2023, Canaan’s miner sales grew by 44% compared to Q1. The company also expanded into new mining projects in Africa and South America.
Canaan’s Recent Performance and Future Plans
In Q3, Canaan sold 3.8 Million Th/s per second of hardware, a decrease from its Q2 performance. However, the company launched the A14 series with higher computing power and obtained a Type 2 license for cryptocurrency mining in Kazakhstan.
This year, Canaan has secured follow-on purchase orders for 17,000 BTC mining machines. Despite a recent share price plunge, the funding will support Canaan’s expansion efforts and position the company for future growth.
Hot Take: Canaan’s Funding Boosts Mining Capacity Ahead of Bitcoin Halving
Canaan’s $50 million funding round provides a significant boost to the company’s mining capacity as it prepares for the upcoming Bitcoin halving event. With increased production capacity and a focus on innovation and research, Canaan aims to capitalize on the bullish market sentiment surrounding halvings. The funding will support Canaan’s expansion plans and help strengthen its position in the competitive Bitcoin mining industry.
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